Micron Technology MU reported first-quarter fiscal 2025 earnings of $1.79 per share, beating the Zacks Consensus Estimate by 2.3%. The company had incurred a loss of 95 cents per share in the year-ago period.
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Micron's revenues increased 84.3% year over year to $8.71 billion and matched the Zacks Consensus Estimate.
Despite reporting strong fiscal first-quarter performance, shares of the memory chip maker plunged more than 16% during Wednesday's extended trading session on dismal second-quarter guidance. Micron's forecast for second-quarter top and bottom lines fell short of the Zacks Consensus Estimate. Shares of MU have gained 7.9% year to date, underperforming the Zacks Computer & Technology sector's return of 34.9%.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. Quote
Micron Q1 Top-Line Details
Technology-wise, DRAM revenues of $6.4 billion, accounting for 73% of the total revenues in the fiscal first quarter, increased 87% year over year and 20% sequentially. The company experienced strong demand for data center DRAM, including HBM.
NAND revenues of $2.2 billion, representing 26% of the total revenues, were up 82% year over year but decreased 5% quarter over quarter.
Other revenues were $68 million in the reported quarter, down from $69 million in the year-ago quarter and up from $59 million in the previous quarter.
Business segment-wise, revenues of $4.4 billion from the Compute and Networking Business Unit soared 153% from the year-ago quarter and 46% sequentially. Revenues of $1.5 billion from the Mobile Business Unit jumped 16.3% on a year-over-year basis and 19% on a quarter-over-quarter basis.
The Embedded Business Unit's revenues were $1.1 billion, up 5.8% from the year-ago period but down 10% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive NAND components, totaled $1.7 billion, up 160% year over year and 3% sequentially.
Micron's Q1 Operating Details
For the fiscal first quarter, Micron posted a non-GAAP gross profit of $3.35 billion, representing a robust improvement from the previous quarter's $2.74 billion. The company reported a non-GAAP gross loss of $35 million in the year-ago quarter. The first-quarter non-GAAP gross margin of 39.5% also improved from the previous quarter's 36.5%. In the year-ago quarter, it had registered a gross margin of 0.8%.
Non-GAAP operating expenses were $1.05 billion compared with the previous quarter's $1.08 billion and the year-ago quarter's $992 million.
Micron's non-GAAP operating income of $2.39 billion was way higher than the previous quarter's non-GAAP operating income of $1.75 million. It also shows improvement from the year-ago quarter's non-GAAP operating loss of $955 million.
The non-GAAP operating margin came in at 27.5%. Micron posted a non-GAAP operating margin of 22.5% for the fourth quarter of fiscal 2024, while it had a non-GAAP operating margin of negative 20.2%.
Micron's Balance Sheet & Cash Flow
Micron exited the reported quarter with cash and investments of $7.58 billion compared with the $9.16 billion recorded at the end of the prior quarter. It ended the quarter with total liquidity of $11.2 billion, flat quarter over quarter.
Micron's total debt, as of Nov. 28, 2024, was $13.7 billion compared with the $13.4 billion witnessed at the end of the fourth quarter of fiscal 2024.
The company generated an operating cash flow of $3.24 billion in the first quarter. It spent $3.2 billion on capital expenditure during the quarter, resulting in an adjusted free cash flow of $112 million. MU paid out $131 million in dividends but repurchased no share in the first quarter of fiscal 2025.
Micron's Q2 Outlook
Micron guided for the second quarter of fiscal 2025. The company anticipates revenues to be $7.90 billion (+/-$200 million) in the fiscal second quarter. The Zacks Consensus Estimate is pinned at $8.96 billion.
For the fiscal second quarter, MU projects a non-GAAP gross margin of 38.5% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.10 billion (+/-$15 million).
Adjusted EPS is anticipated to be $1.43 (+/- 10 cents). The consensus mark is pegged at a loss of $1.95 per share.
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